Amends definition of "distressed property
consultant" to add public accountants and certified public accountants to
the list of exclusions. (CD1)

THE SENATE

S.B. NO.

35

TWENTY-FIFTH LEGISLATURE, 2009

S.D. 1

STATE OF HAWAII

H.D. 1

C.D. 1

A BILL FOR AN ACT

RELATING TO MORTGAGES.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

SECTION 1. The
purpose of this Act is to exempt certified public accountants, who are already regulated by and subject to the rules
adopted by the board of public accountancy, from the provisions of the Mortgage
Rescue Fraud Prevention Act.

""Distressed property
consultant" means any person who performs or makes any solicitation,
representation, or offer to perform any of the following relating to a
distressed property:

(1) Stop or postpone the foreclosure sale or loss of
any distressed property due to the nonpayment of any loan that is secured by
the distressed property;

(2) Stop or postpone the charging of any lien or
encumbrance against any distressed property or eliminate any lien or
encumbrance charged against any distressed property for the nonpayment of any
taxes, lease assessments, association fees, or maintenance fees;

(3) Obtain any forbearance from any beneficiary or
mortgagee, or relief with respect to a tax sale of the property;

(4) Assist the owner to exercise any cure of default
arising under Hawaii law;

(5) Obtain any extension of the period within which
the owner may reinstate the owner's rights with respect to the property;

(6) Obtain any waiver of an acceleration clause
contained in any promissory note or contract secured by a mortgage on a
distressed property or contained in the mortgage;

(7) Assist the owner in foreclosure, loan default, or
post-tax sale redemption period to obtain a loan or advance of funds;

(8) Avoid or ameliorate the impairment of the owner's
credit resulting from the recording or filing of a notice of default or the
conduct of a foreclosure sale or tax sale; or

(9) Save the owner's residence from foreclosure or
loss of home due to nonpayment of taxes.

"Distressed property consultant"
shall not include any of the following:

(1) A person or the person's authorized agent acting
under the express authority or written approval of the federal Department of
Housing and Urban Development;

(2) A person who holds or is owed an obligation
secured by a lien on any distressed property, or a person acting under the
express authorization or written approval of such person, when the person
performs services in connection with the obligation or lien, if the obligation
or lien did not arise as the result of or as part of a proposed distressed
property conveyance;

(3) Banks, savings banks, savings and loan
associations, credit unions, trust companies, depository and nondepository
financial service loan companies, and insurance companies organized, chartered,
or holding a certificate of authority to do business under the laws of this
State or any other state, or under the laws of the United States;

(4) Licensed attorneys engaged in the practice of
law;

(5)Certified public accountants licensed
under chapter 466, persons holding a permit to practice public accountancy in the
State of Hawaii, and persons holding a valid certified public accountant license issued under the laws of another state
or territory who are lawfully practicing in the State of Hawaii with a
temporary permit to practice pursuant to rules established by the board of public
accountancy and who are subject to regulation by the board of public accountancy
while engaged in the practice of public accountancy;

[(5)] (6) A federal Department of
Housing and Urban Development approved mortgagee and any subsidiary or
affiliate of these persons or entities, and any agent or employee of these
persons or entities, while engaged in the business of these persons or
entities; or

[(6)] (7) A nonprofit organization that,
pursuant to chapter 446, offers counseling or advice to an owner of a
distressed property, if the nonprofit organization has no contract or agreement
for services with lenders, distressed property purchasers, or any person who
effects loans or distressed property purchases."

SECTION 3. Statutory material to be repealed
is bracketed and stricken. New statutory material is underscored.